Last July, as IBM Vice President of Investor Relations Patricia Murphy prepared to introduce the company's CFO, Mark Loughridge, at the start of the technology giant's 2Q earnings call, she once more issued the boilerplate disclaimer intended to shield the company from liability for forward-looking comments.

"Let me remind you that certain comments made in this presentation may be characterized as forward-looking. ...Those statements involve a number of factors that could cause actual results to differ materially," cautioned Murphy, repeating the requisite disclosure statement dispatched by top IR executives everywhere.

However, in the case of IBM -- and the world of finance at large -- the act of hitching rescue lines to forward-looking statements underscores the irony of being a CFO these days: Finance leaders remain tethered to the past even as they are implored to explore the future.

Today, in the wake of the downturn's surprise bite and in an economy that leaves no hint as to what's around the next turn, finance has been handed an urgent edict to stop spending so much time reporting what's already occurred and to start informing management about what's yet to happen.

A Multilingual Approach

At IBM, this edict recently led to a forecasting "bake-off" between the company's traditional finance forecasters and a team of forecasters fielded by the company's research organization. The research team's revenue forecasting model won -- an undeniable blow to traditional forecasting models and a decisive win for greater collaboration between IBM finance and a renowned research organization.

"Correctly identifying external factors and incorporating them into company forecasting models is becoming a top finance priority as more companies look to improve forecasting capabilities," says Sean Kracklauer, president of advisory services and research for The Hackett Group.

According to Hackett's 2010 Finance Book of Numbers, finance executives identified the improvement of forecasting capabilities as their number one priority for the finance function in 2010.

Steve Player, founder of the consultancy The Player Group, uses the analogy of a hurricane response center when characterizing finance's growing focus on the future.

"Hurricane response centers don't just go back and assess damage, they get out in front of the storm and into a position where they're anticipating what's happening. They have contingency plans in place, and they know what they will do if the storm moves left or right," explains Player, who says that finance now fills the "navigator function" for a firm.

As such, Player says, finance is the translator for the organization and must be "multilingual" in order to tear down any figurative language barriers that exist.

In the case of IBM, the company's recent forecasting "bake-off" was intended to remedy just such a communications challenge.

"Initially, our finance team was hesitant to adopt the research team’s model because they felt that the complexity of the algorithms led to a lack of transparency underneath the covers, so we said, ‘Let’s have a bake-off for about 6 months, and we’ll measure the accuracy of both,’” says Marc Berson, director of business analytics within finance IT. “Finance and research didn’t speak the same language in terms of the process used to achieve the end result, but at the end of the day, empirically the accuracy of the forecasted numbers versus the actuals can’t be ignored."